9

Is the answer to this different if I choose to leave, versus if my employment is terminated? Are the funds my employer contributes towards my pension fund treated differently than the ones I contributed myself?

5

The handling of register pension plan is a very complex discussion, unfortunately... The good thing is that the rules are generally well-documented by the plan administrator - ask your company's HR for that info.

I am going to assume we are talking Defined Benefit Plans here. Generally speaking, you can't take your pension with you without you having to pay taxes as if you were withdrawing it (they called taxing at the source), even if you are "transferring" to the pension plan at your new employer. This type of pension plan is really an obligation from the company to pay you at the prescribed rate (based on your years of services and other parameters they defined) for the rest of your natural life, and should not be viewed as your RRSP/401K.

If we are talking about Defined Contribution Plans, then it is very much like RRSP/401K with the exception that it has to either transferred tax-free to a LIRA account (and sometimes you can transfer to your new employer's DCP) or be treated as if you are making a withdraw (and get taxed in full).

Generally speaking the handling would be identical regardless the nature of your departure, but do check the documentation with your company's plan administrator.

Hope this helps.

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